Gold, silver still have ‘a lot of potential’ for upside after a record year, chart analyst says
Gold and silver’s rallies could continue into the new year.
The two precious metals closed out their best years since 2010 on Thursday following a year of unprecedented volatility brought on by the Covid-19 pandemic.
Barring some minor hurdles, the new year could bring new records for the commodities, Matt Maley, chief market strategist at Miller Tabak, told CNBC’s “Trading Nation” on Thursday.
“They both look pretty good here. We do need a little bit more upside in both of them to really confirm that it’s reigniting its upward trend,” Maley said, referencing a chart of silver prices.After a substantial rally in the first half of 2020, silver and gold both “saw a downside move in August and September,” with silver breaking below a trend line extending back to its March low, Maley said.
“That really worried me. I thought, ‘Geez, this is going to be a problem for silver,’” he said. “But then, instead of making a lower low, it held its early-fall lows and made a double bottom. That was bullish.”
That propelled the metal to make a new higher high above its November peak, another “very bullish,” sign, the strategist said.
“Now, … it’s slightly above that trend line, but it needs to move a little bit higher to kind of confirm that it’s reversing its trend,” Maley said. “But it’s getting very close. So, a lot of bullish potential there.”
Fox Business/Associated Press
China warns of retaliation for NYSE’s delisting of companies
China said Saturday that it would take necessary countermeasures in response to the New York Stock Exchange’s announcement that it would delist three major Chinese telecoms, in the latest flare-up of tensions between Beijing and Washington.
The stock exchange said Thursday that it would delist China Telecom Corp. Ltd., China Mobile Ltd. and China Unicom Hong Kong Ltd., with trading of the companies to be suspended sometime between Jan. 7 and Jan. 11.
The move stems from an executive order President Donald Trump issued on Nov. 12 barring investment in publicly traded companies that the U.S. government says are “China opposes the Americans from abusing national security by listing Chinese companies into the so-called ‘Communist China Military Companies’ list and will take the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies,” a spokesperson for the Chinese Commerce Ministry said in a statement.owned or controlled by the Chinese military.
The actions will also “greatly weaken all parties’ confidence in the U.S. capital market,” the statement said.
The ministry did not offer details on what the measures might be.
Gold Hits Two-Month High as Dollar, Real Yields Face Pressure
Gold powered above $1,900 an ounce to hit the highest level in almost two months, aided by a weaker dollar, after posting the biggest annual advance in a decade. Silver also surged on the first full trading day of the new year, while platinum advanced to its priciest since 2016.
Bullion is rallying as a gauge of the U.S. currency languishes at the lowest level since 2018 after sliding for three quarters. The gains in the haven come even as U.S. and global stocks are at all-time highs amid expectations that widespread vaccine distribution in 2021, further central bank support, and government aid will reignite growth and underpin better corporate profits.
Gold’s recent climb has also been aided by renewed declines in U.S. real yields, which boost the precious metal’s allure. Real yields — the difference between nominal benchmark bond yields and the rate of inflation — were at -1.092% on Friday, near last year’s nadir. The figure ticked up on Monday.
“I see gold being pushed higher by lower real interest rates and higher inflation expectations,” said Nicholas Frappell, global general manager at Sydney-based ABC Bullion. “The market is not looking for any signs of tightening should inflation pick up in the near term. Gold traditionally outperforms when real interest rates are low.”
More cases of new Covid variant found in the U.S., threatening to worsen nation’s outbreak
Three states across the U.S. have now identified cases of the new coronavirus strain in people with no travel history, a sign that the variant could already be spreading unknowingly among Americans.
Florida health officials on Thursday announced that they found the state’s first case of Covid-19 with the new, more infectious virus variant. The man, who lives in the county just north of West Palm Beach, is in his 20s with no history of traveling, the Florida Department of Health said in a Twitter post.
The Florida man is among the first handful of people to be diagnosed with the new variant, known as B.1.1.7., first identified in the United Kingdom. California has now identified at least four cases of the new strain in San Diego county among men with no reported travel histories. The cases have come only days after Colorado health officials detected the first couple of cases in people who hadn’t traveled.
“I’m not surprised that you have a case, and likely more cases, in California,” White House coronavirus advisor Dr. Anthony Fauci told Gov. Gavin Newsom on Wednesday after he announced state health officials had found their first case. “We likely will be seeing reports from other states.”